Runaway overtime spending at CTA

Working for a public agency with a runaway overtime problem, CTA veteran Jackie Hubbard logged an average of 34 hours of OT on top of each 40-hour week, according to payroll records.

"Some people at CTA are picky about the type of work they do and the hours they work," said Hubbard, a rail service supervisor. "Not me. Overtime is something I sought, and I took any piece of work available."

It paid off — and will keep paying off for Hubbard into the future. Not only did she receive more than $436,000 in overtime pay since 2005, but her pension checks will balloon by more than $46,000 each year because of a unique perk long ago negotiated into CTA contracts.

At the CTA, overtime is included in calculations used to determine pensions.

Hubbard's $66,231 annual base salary was supplemented by $84,566 in overtime pay in 2010, according to CTA payroll records obtained by the Tribune through the Freedom of Information Act. Those were the biggest contributors to paychecks totaling $153,280 and made Hubbard the top wage-earner for the year among unionized CTA employees, the records show.

The agency estimates that such added pension payments to all union workers cost $9 million a year and about $90 million over the life of the benefits.

Among all the public agencies in Illinois, only at the CTA can employees boost their pensions with overtime — a practice that has been in place since at least 1965, according to CTA officials.

Unfortunately for taxpayers, the one agency that uses overtime to calculate pensions also has struggled to contain its overtime costs.

Exactly how much the CTA pays out in overtime has not been completely clear.

The agency has put its 2010 overtime costs at $19.8 million.

A Tribune analysis, however, found more than $29 million in overtime.

The Tribune investigation found that although the CTA pays 11/2 times the regular hourly wage to union employees who work more than 40 hours per week, it counts only part of the additional payment — the "half" in time and a half — as overtime for some workers.

So a bus driver or train operator who works eight overtime hours receives 12 additional hours of pay, but only four of those hours are considered overtime — or "premium pay" as the CTA calls it.

The CTA rejects the idea that this accounting method lacks transparency. Officials said the extra pay for overtime was anticipated in the agency's operations budget to account for the difference between a regular eight-hour shift and the number of work hours needed to complete bus and train runs.

"It is not extra money we are burdened with, because it is operationally built into the system," CTA spokeswoman Molly Sullivan said. "Does it cost us money? Yes. But it is budgeted for."

'Mandatory overtime'

Overtime excesses are part of the reason the transit agency is mired deep in red ink, CTA officials said. Labor costs account for about 70 percent of operations. Officials are trying to negotiate contract concessions from labor unions while also warning riders about possible fare hikes and service cuts later this year.

CTA President Forrest Claypool, who took over last May, accepted responsibility for only part of the high overtime costs. He attributed the majority to previous administrations that approved work rules preventing managers from increasing efficiency.

"Part of the overtime problem is management's responsibility, and we've taken steps where we can control the process to crack down," Claypool said. He and union officials who were interviewed for this article spoke before negotiations that are under way on a new employee contract.

Claypool said there is too much "mandatory overtime" and situations where unproductive work rules give employees with the most seniority an incentive to pick shifts that virtually guarantee overtime. He cited rail service supervisors as the leading example.

As one of the top CTA job categories for overtime, 51 of the 53 rail service supervisors received overtime in 2010, totaling $1.1 million and averaging $21,716 in overtime per individual, according to the Tribune analysis.

Claypool responded in October by eliminating overtime from rail service supervisors and other supervisory positions.

Yet total overtime increased by about $1 million in 2011, to $30.9 million (or to $21.2 million based on the CTA's accounting methods).

The biggest chunk of overtime pay in 2010 — $5.4 million, based on the CTA's definition of overtime — went to bus drivers, according to the Tribune analysis of the payroll. Some 95 percent of the 4,582 bus drivers received overtime pay in 2010.

Thanks to overtime, the top-earning bus operator received a total of $132,268 in 2010, which included $68,877 in overtime to more than double his base pay of $59,580, records indicate.

Who is responsible?

Management and labor disagree over who is responsible for the current expensive labor practices.

"The CTA is making a cheap attempt to blame the employees and not be out front with the solutions," said Javier Perez Jr., an international vice president with the Amalgamated Transit Union. "They want to say, 'We've tried everything. We've demonized employees and couldn't get the cuts we needed, so we have to raise your fares.'"

CTA officials said overtime and inefficient work rules are a big part of the reason the transit agency faced a $277 million budget deficit going into 2012, which the agency has so far whittled down to an $80 million budget hole. The rest of the cost savings must come from sweeping changes in work rules, Claypool said, adding that "work rules that embed overtime" must be jettisoned.

But many CTA employees said overtime is strictly controlled — and therefore assigned — by management.

"The CTA basically caused the overtime problem themselves by laying off more than 1,000 bus drivers" in 2010, said Woodrow Eiland, 46, a 17-year CTA veteran who has worked as a bus instructor for the last 10 years. "If they would have kept those drivers, there wouldn't be overtime."

In many cases, CTA employees receiving overtime pay are not working extra hours, CTA officials said. Yet there is nothing management can do about it under the current collective-bargaining agreement, which expired Dec. 31 but is being extended until contract negotiations produce a new agreement.

CTA linemen, electricians, signal maintainers and ironworkers, among others, have set work hours of 7:30 a.m. to 3 p.m. Mondays through Fridays. Regardless of the number of hours worked, they receive overtime equaling 11/2 times the regular hourly wage if they work outside those set hours, according to the contract. Ironworkers receive double pay.

The CTA often assigns such workers to odd-hours shifts at night and on weekends to avoid disrupting the commuter rush hours. In talks on the next contract, CTA negotiators will propose that these workers receive straight-time pay or, at most, a shift differential, instead of the overtime rates, officials said.

The existing contract also requires that CTA ironworkers be driven around by Teamsters, who receive the "me-too" overtime wage when the ironworkers are on overtime even if the driver hasn't yet worked 40 hours. The chauffeurs each received an average of more than $43,000 in overtime in 2010, records show.

Officials also complain that the current system of employees picking their schedules, which is based on seniority, allows the most veteran bus and rail operators to select assignments that guarantee overtime. The system also prevents the CTA from matching experienced drivers with the most difficult routes, often leaving the newest bus and train operators to work rush hours, officials said.

Senior bus and rail operators who have first choice over picking their schedules often take advantage of additional overtime opportunities that require little or no work, officials said.

For instance, employees with seniority frequently volunteer for the "extraboard," which is a list of hundreds of bus and train operators who are on paid standby to fill in for employees who call in sick. Absenteeism is a huge problem at the CTA, costing the agency up to $40 million a year, including overtime and the cost of keeping extra personnel on standby to avoid canceling runs, the Tribune reported in October.

Bus drivers and rail operators earn money while waiting on the extraboard, and they also avoid violating rest rules that limit how many hours they can drive buses or trains in a 24-hour period.

Room for improvement

Despite these handicaps, the CTA can do much more to control costs, according to interviews with current and former CTA employees and executives.

The transit agency does not yet have a uniform employee timekeeping system, despite efforts to install one dating to the last two CTA administrations. Time sheets and overtime are handled differently at bus garages, rail lines and on the administrative level, making it difficult at best to collect accurate information about how money is being spent, officials said.

"We were supposed to get a biometrics-based time-tracker system to help us better manage time and keep track of who was going in and out," said a former top CTA executive. "But biometrics was dropped."

Biometrics involves using information that is unique to each individual, such as fingerprints or iris scans, to identify employees.

Claypool said it will be a slow process to drive down costs because his management team is still getting a handle on where money is spent.

"It has been difficult to corral accurate data in this bureaucracy because in the past it was not a priority," Claypool said. "We are going to manage overtime more aggressively and rein in abuses."

If the unions don't accept work rule changes and other concessions, fare increases and service cuts could be implemented by summer, Claypool warned.

The agency's unions have already said they will fight Claypool's strategy.

"This is not about the union protecting existing work rules," said Perez, the bus union official. "It's about providing quality transportation to this city and paying people what is a reasonable rate. Think how much we can save on health care if all the doctors were willing to work for minimum wage. That's not going to happen."